TaxTMI 
TaxTMI 
2010 (1) TMI 767
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....he learned Assessing Officer and respectively disputed by the assessee and the Revenue, vis-a-vis orders of the learned Commissioner of Income-tax (Appeals) is reproduced below: Anil Bhatia (paper book page 1) Assessment year Assessee's appeal grounds Revenue's appeal grounds 2006-07 Gift Rs.5,18,631 from real brother in law Agricultural income Rs.36,474 Notional interest Rs.27,000 2005-06 Agricultural income Rs.36,474 Notional interest Rs.27,000 2004-05 Agricultural income Rs.10,33,129 Notional interest Rs.27,000 2003-04 Gift Rs.2,71,000 from Ram Rattan Garg Alleged unexplained deposit in bank Rs. 1,50,000 Alleged loan to Chander Mohani Sharma Rs. 1,50,000 Agricultural income Rs.16,699 2002-03 Agricultural income Rs.6,12,885 Alleged unexplained deposit Rs.57,115 2000-01 Alleged unexplained deposit Rs.2,50,000 Rs.13,89,095 addition for alleged ingenuine exchange fluctuation 2006-07 Agricultural income Rs.35,229 2005-06 Agricultural income Rs.33,854 2004-05 Agricultural income Rs.10,38,706 2003-04 Gift Rs.2,50,000 from Ram Rattan Garg Agricultural income Rs.17,260 2002-03 Agricu....
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....six years' assessment, being drastic in consequences needs to be interpreted most strictly and wherever possible to the favour of the assessee. (e) That since the longest arm of the Revenue, being search action under section 132 of the Act, stands exercised in present case, assessment under section 153A needs to be made on the basis of hidden assets/un accounted money, incriminating material unearthed during search. For this reliance is placed on the decision of the Allahabad High Court in the case of Dr. R.M. L Mehrotra1 (case law paper book pages 15 to 18). (f) That assessment under section 153A on the basis of search action under section 132, cannot and should not be equated to regular/normal scrutiny assessment under section 143(3). 1. Reference appears to be to [2010] 320 ITR 403 (All.). (g) That power of review being not available to the same authority under the Act in normal circumstances must/should not be allowed in the present provisions of section 153A where last weapon in arsenal of the Department (search) stood used, as otherwise it would allow roving and fishing enquiries in search based assessment, which is not the legislative intent. ....
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.... 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall- (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply- accordingly as if such return were a return required to be furnished under section 139 ; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in thi....
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....penses for earning the same is taxable, when interpreted in the specific context of section 153A. 11. In the Ahmedabad Bench of the Income-tax Appellate Tribunal in Meghmani Industries Ltd. and Meghmani Organics Ltd. (supra) the following ratio is available: "Learned counsel, Shri Soparkar, senior advocate submitted that a search was conducted by issue of warrant of authorisation in the name of the assessee. During the course of search not a single piece of evidence was found which depicts that any income which has been earned by the assessee has not been disclosed. There is no reference to any materials so found while computing the income under section 153A of the Act. Merely because search is conducted, the assessment which has become final cannot be reagitated on a difference of opinion. In the original assessments deduction claimed under sections 80HHC and 80-IA were the subject-matter of dispute. The appeals were pending before the learned Commissioner of Income-tax (Appeals). As per the first proviso to section 153A, though the Assessing Officer can assess or reassess total income of six assessment years immediately preceding the assessment year relevant to th....
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....only the pending assessment or reassessment and not the completed assessments. In such a situation the power to frame assessment under section 153A of the Act shall be to the extent of income escaping assessment coming to the knowledge of the Assessing Officer during the course of search. Sub- section (2) of section 153A of the Act inserted by the Finance Act with retrospective effect from June 1, 2003 dispels the doubt of the Department as to what will happen if the original assessment abates and if the proceeding initiated under section 153A(1) is annulled. As per sub-section (2) of section 153A of the Act the original assessment stands revived. Harmonious reading of the provisions of sub-section (1) read with the first and the second provisos to section 153A of the Act and sub-section (2) to section 153 of the Act makes it clear that only pending assessment or reassessments shall abate and not all the assessments comprising of the period mentioned in section 153A(1)(b) of the Act. Even if the proceedings under section 153A(1) of the Act are to be annulled, the original assessment stands revived. This shows that there can be duality of the assessment for the same assessment year.....
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....ces, the principle of literal construction is of no help. One of the salutary rule is rule of harmonious construction. According to this rule, a statute must be read as a whole and one provision of the Act should be construed with reference to other provisions in the same Act so as to make a consistent enactment. The meaning of assessment/reassessment does not always mean taking recourse to the whole procedure laid down in the Act for computing the tax liability. It is possible to effect reconciliation of the two provisos appended to section 153A by restricting the meaning of the term 'assess or reassess' appearing in the first proviso. After the search, the total income of the assessee is to be recomputed on the basis of the undisclosed income unearthed during search and the same is to be added with the regular income assessed under section 143(3) or computed under section 143(1) for each of the six preceding assessment years... This meaning when articulated in the context of section 148, more appropriately fits in context of section 153A." 14. The Lucknow Bench of the Income-tax Appellate Tribunal in Kailash Auto Finance Ltd. v. Asst. CIT [2009] 32 SOT 80, on connotation ....
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....ns filed in due course before search, and no material being found in search thereafter, no addition can be made for agricultural income, gifts, unexplained deposit as stated in chart (supra). 17. As regards, solitary addition of Rs.1,50,000 relating to alleged unexplained/unaccounted loan to Mohani Sharma (Anil Bhatia case) and consequential addition of presumed/alleged interest thereon of Rs 27,000 in the assessment years 2003-04 to 2006-07, after analysing the subject document carefully, recovered from search, we are of the view that same does not bear signature of the assessee nor Mohani Sharma (alleged borrower) has Smt. Mohani Sharma been ever examined by the authorities below. Therefore, it lacks corroboration and cannot be made the sole basis to make subject additions. In this connection, we do not find merit in submission of the learned Departmental representative that the assessee should have produced Mohani Sharma or an irrebutable presumption needs to be drawn for unaccounted income emerging therefrom. It is well settled that an unsigned document which is stated to have been never acted upon right from the beginning, cannot be presumed to contain undisclosed/unac....